When buying a security for the first time, the ASX prohibits the settlement of any transaction that will establish a holding of less than $500.00 based on the closing price of that stock (also known as an 'un-marketable parcel').
As such, for your first holding in a security you cannot submit an order valued at less than $500.00 (excluding brokerage). Additionally, if using the 'market then limit' price type an additional price buffer will be added, which varies based on the pricing of the security (orders using the 'Limit' price type are not affected by the buffer requirement).
If your order does not comply with the minimum parcel and buffer rules, you will be shown an error message stating that new holdings must have a minimum buy of $500.
Due to these requirements, we recommend that your cash account has a minimum balance of $550.00 before establishing a new holding on the ASX.
After You Own Shares
If your holdings value of a single stock fall below the minimum marketable parcel of $500, i.e. via partial sale or natural drop in price - On a next purchase, you will need to purchase an order valued of at least the remaining amount to ensure that holding reaches $500 or more.
For example:
You purchase a stock with a total order value of $700.
Provided the stock price stays the same, you decide to sell $350 worth of stock, leaving your stocks valued at $350.
Provided the stock price stays the same again, you then decide to purchase another $100 worth of stock - This will be rejected, as it hasn't met the marketable parcel rule of $500.
You would need to purchase at least $150 to meet the marketable parcel rule again.